Capstone Mining Corp.
TSX : CS

Capstone Mining Corp.

March 28, 2006 09:15 ET

Capstone Provides Construction Update for The Cozamin Copper-Silver-Zinc Project, Zacatecas, Mexico

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 28, 2006) -

(all amounts in $US unless otherwise stated)

CAPSTONE MINING CORP. (TSX:CS) is pleased to report the construction progress at its Cozamin copper-silver-zinc project located in Zacatecas State, Mexico.

Highlights

- Start-up is on schedule for the 3rd quarter of 2006.

- Initial mill throughput rate will be 1,000 tonnes per day equal to 350,000 tonnes per year.

- Estimated average annual metal production is 16 million lbs of copper, 700,000 oz's of silver and 4 million lbs of zinc at the initial production rate.

- Total copper cash costs are $0.80 per lb including smelter and freight costs (net of by product credits).

- Estimated remaining capital cost to production is $7 million, which Capstone has on hand.

San Roberto Mine

Stope preparation has commenced on level 8, with 2 stopes anticipated ready for mining by the end of May. On level 9, drifting in the footwall of the Mala Noche vein and parallel silling out of the ore zone have been completed over 300 m to the east of the main shaft. This will allow for development of 1 new stope. On the central portion of level 9, one existing stope will be rehabilitated. Development on level 10 has commenced with drifting both east and west on this level.

A total of 5 stopes are planned for production mining during the 3rd quarter. Rehabilitation and slashing of the internal ramp connecting level 8 to level 9 is complete. This ramp has been extended below level 10 towards the future level 10.5 which will allow installation of a loading station and dump pocket in the shaft.

The San Ernesto decline ramp from surface to level 8 has been completed. This ramp will be used for access to the mine for personnel and mining equipment and thereby increase the haulage capacity for ore in the shaft.

Underground mining and development is currently being conducted by contractors. Capstone has ordered its own fleet of mining equipment which will begin arriving in April. All of the equipment is scheduled to be on site by the end of June.

Mill and Plant

Crushing plant modifications, including the installation of the 4 foot (1.22m) cone crusher are complete. The plant was successfully commissioned on March 1 and is currently providing sized crushed rock for road gravel both on surface and underground, as well as backfill material around the mill foundation.

Main foundations are complete for both the fine ore bin and the 12' X 15' (3.65 X4.57m) ball mill. Mechanical installation has begun and is scheduled to be finished by early June. The substation for the new mill is installed on site and awaiting wiring.

Installation of the new and refurbished flotation cells in the plant commenced in early March. All major equipment required for the mill and plant has been purchased and received on site.

Surface

Construction of the first lift of the tailings dam expansion started in January and is planned to be complete in May. This 12 m lift is designed to store an additional 4 years of tailings. Refurbishments to the main offices and warehouse are complete and work has commenced on rehabilitating the maintenance shop. The modifications and upgrade of the assay/metallurgical laboratory were completed in January and this facility is now processing mine samples.

Budget

The remaining costs to complete the project are estimated at $7 million. All major equipment for the mine and plant has been purchased. All major construction and mine development contracts have been let and are in progress. Capstone is well financed, has no debt, and has the required funds to bring the project to production.

Exploration

The Phase III underground definition program has been completed. A total of 115 NQ core holes have been drilled for a total of 18,100 m. Results for the first 100 holes have been reported in previous news releases, with results for the remaining 15 holes pending. These additional drill intercepts will be part of an updated resource estimate to be completed in 2006. This definition drilling was distributed over only 750m of strike length below the existing level 9 (260 m below surface) in the San Roberto mine area. The exploration drilling indicated that the copper-silver-zinc mineralization is present to a depth of at least 400m below level 9 over a strike length of at least 1,400m. Thus, definition drilling has been completed over about 60% of the mineralized volume indicated by exploration drilling below level 9. The copper-silver-zinc mineralization remains open along strike to the west and to depth. During the second half of 2006, Capstone plans to continue definition drilling below level 9 and thereby increase resources in the measured and indicated categories. In addition, at least 3 km of known strike extent of the Mala Noche vein remain untested by surface exploration drilling.

The definition drilling to date has confirmed that the copper grades in the San Roberto mine increase significantly below level 8 and the silver grades remain undiminished. The copper and silver occur predominantly in a pyrrhotite-pyrite-chalcopyrite phase of mineralization that is interpreted to have a mesothermal origin. Capstone management anticipates that this mineralized phase will extend beyond the area tested by surface exploration drilling to date.

On March 2, 2006, Capstone reported the results of the feasibility study for the Cozamin project. This study has been filed and is available for review on www.sedar.com.

Qualified Persons, Robert Barnes, P.Eng., Vice- President of Mining and Hugh Willson, P.Geo., Vice- President of Exploration for Capstone Mining have reviewed and approved the contents of this news release.

ABOUT CAPSTONE

Capstone is a Canadian based mining company focused on developing its Cozamin copper-silver-zinc mine located in Zacatecas State, Mexico. Capstone has approximately 63 million shares outstanding and is well financed with no debt. More information is available online at: www.capstonemining.com.

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